As England faced a serious problem of money shortage in the 1690s, the authority used all measures to prevent smuggling out, melting and hoarding of silver coins, but all proved in vain. A main cause was that France had serious financial deficits, and thus devalued French money by 10%. This attracted hot money from foreign countries into France for arbitrage profits. Large quantities of silver were shipped abroad, bringing on heavy losses to England.Despite all kinds of suggestions and heated debates, the government was unable to resolve the issue effectively. In December 1695, after the Parliament voting, the Treasury made a decision thatthe silver content of coins wouldnot be changed. This means that while France devalued 10%, England still maintained the value of silver coins as set by Tudor Queen Elizabeth in 1601. The silver value of English coins was therefore officially set higher than their face values. Consequently, coins were melted and exported, with losses of 12% of total silver in 1685, 15% in 1688, 30% in 1692 and 49% in 1695 respectively. The Treasury (led by William Lowndes) tried to devalue, but an opposing group (led by the philosopher John Locke) argued for returning to the Tudor standard (to appreciate). This paper analyzes why the Treasury lost the battle in the Parliament. The role of Isaac Newton was ambiguous: in public debates he supported Locke’s claim to return to the Tudor standard (appreciate money), while in a written manuscript (1695), he supported Lowndes’s claim for a heavy devaluation (25%). This controversy, when judged by today’s economic mentality and policy orientation, is quite probable that Lowndes’s claim for a heavy devaluation (25%) might win in the Parliament. Most delegates would have agreed to three important measures: (1) completely prohibitingthe export of silver bullion and coins; (2) or prohibitingexport of silver bullion and coins within a certain period; (3) and/or increasing coinage supply (in today’s terms: quantitative easing). These three policies couldreduce England’s silver outflow and avoid domestic money shortage, because money shortage had important consequences, such as deflation, higher interest rates, consumption slump, discouraging investments, increasing unemployment and social instability, etc. Moreover, the devaluation of Pound would help the export of English products and discourage foreign imports. Why did John Locke and his followers tend to appreciate, returning to the silver content of Tudor coins? In terms of mentality, they might thinkthat the State should maintain the intrinsic value of moneyrather than alter the silver contents at discretion,otherwise people wouldlost confidence, impairingbusiness transactions at home and abroad. For these reasons, Locke won the Parliament’s final decision. The attitude of Newton was ambiguous. On the one hand, he was in favor of devaluation (same as the Treasury), as manifested in his 1695 manuscript. On the other hand, he supported Locke’s line of appreciation (returning to the Tudor money standard). This ambiguity was a kind of mental paradox between sense and sensibilityoften observed in Newton’s personality as has been noted by many biographers.